no overall most plants of looking at something in the vicinity of the 5 percent reimbursement that. in 2014. now if you're assuming that cost trends will rise a percenter to then these plans are facing some more in the vicinity of the 700 basis point headwind. down 5%. cost trend up. plans will be allowed to adjust the benefit in most of the region to be able to absorb the bulk of that. there may be of the bid of margin pressure as well, but the embarrassment.

nothing said been compounded because rates have not gone up, but i would think of 2010 as being a somewhat comparable example where reimbursement was down quite a bit. plans were able to cut benefits commensurate and you actually did cd-rom that increase. so there is some historical precedent for some seemingly be reimbursement cuts being able to be mitigated by the cost efficiencies. >> one thing i was going to say. once again, i think the change in the benchmarks have put the plans under pressure to find the efficiencies that, in theory, they should have been pursuing all along. and so i do think that -- i don't mean this -- you ask what you are missing. the mustang you're missing this, but what i see is a big change over the last 34 years.

the base of the plans relative to fee-for-service have come down, and they're creating the room under fee-for-service to finance the benefits. each year we keep looking at these bids. you tell me. the bids come in and the plans themselves are projecting nine and 10 percent increases in enrollment. they think they're going to be increasing enrollment when in an environment where everybody is pressurized. it is not just the in may plans. fee-for-service is under pressure. the same sequester. and it plans -- they can actually bid themselves away from some of that to some extent, although they risk losing beneficiaries. rightly or wrongly, the congress set up -- apparently this does not help you pair really a run in the congress set up a system to have higher benchmarks in those parts of the country where managed-care cannot do as well. that is an important policy question that we ought to

discuss. one of the reasons that people want to be optimistic as they are specifically subsidizing plants in certain parts of the country and then something else the of the people said. i'm sorry. did not need to sell this. the quality rankings. i mean, that will drive money to certain plants. i think plants can leverage that and continue to even get additional resources to offer benefits. i don't mean to imply you're missing anything, but that's. at least in the near term, that's what i see. the projections ten and 15 years after my have no idea. >> paul cotton with the national committee for quality assurance. when we look at the scores that are coming into us, we are seeing a lot of the plans that in the past for not very serious about quality scores and now that dollars are attached to being very creative. whether some of the examples you are seeing, things they're helping to get the plants course up and also the second question,

how can we make those measurements more relevant to the beneficiaries of the dew actually care when they get to pick a plan? for example, right now medicare listed by the cheapest plan first inning after really care. maybe if they had the high quality plans first with that helped drive more and roman? >> yes. i would say from the plan perspective, with the company's the man as he said, they started to care about them that their dollars attached. if you go to any one of these companies it will have a whole team of people that will be able to tell you down to a contract where you are on a specific metric. and so what the companies have done is they first go after the low hanging fruit. a county or a contract where they're currently at just under four stars and if they can get 50 more people to see a primary

care physician and will push them up. well, that's where the dollars would go. they start making outbound call saying to the doctor, the member, you need to go in and see your doctor. so it's been very, very targeted to this point. as the rating start to get better it will be more difficult for the plan to see those kind of improvements because getting from a three and a half to 04 star is obviously is a much bigger job than if you're right on the cusp. that's what they have done up until this point. terms of how you get seniors to care about it, your idea of the sorting, i guess, is directly with the try. this seems like every single selling season number one is what is the premium. then may be right below that is is my doctor in the network. then everything else is just so far down last in terms of copay, deductibles, star ratings. this is a huge gap between those first two and everything else.

>> i would add that plans are working hard to try to get better data because a lot of it has to do with getting the data and in employing the types of practices where you can see improvements. and i don't know that i agree with you that people aren't paying attention to the ratings. at think you're seeing greater attention to the ratings. and i know that cms is looking at using similar ratings for the exchange products. i think you're going to see attention to these kinds of operating systems across the board. >> go head. >> hi. my name is brian cabell with a national rollout association. and i'm wondering what these fees and reductions in other changes are having on medicare advantage plans in relationship with pro safety net providers, particularly critical access hospitals.

>> well, i just think that to be candid those cuts are a huge, up ahead, and there is going to be -- it's going to put a lot of pressure providers, and keeping -- you're going to see increased cost sharing and it's going to be difficult to maintain the kinds of levels we have seen. so we're very worried about it. it's huge. >> coed. >> mike miller. policy consultants. mark brought up the concept of how medicare advantage can compete for the same market as fee-for-service. one thing i have heard from the talk is that a ceos, the shared savings programs, is someone like a training ground are minor

leagues for full competition make your vantage. anybody in the panel talk about those kinds of plans to organizations and involving drilling into medicare vantage plans and how that might affect the future band with from medicare vantage, the number of plans and then released? thanks. >> i don't know. maybe people at the other end of the table would be better positioned to speak about this being, you know, closer to the industry. the people who are coming into my office, you know, i lost an. where are you? there you go. for some reason i contact tells me. i feel like i'm actually talking to the person as the question. the people they're coming into our offices and talking to us seemed to up mostly breakout on this side of, no, this is a provider driven organization.

it's different than insurance organizations, and there are certain advantages to that. even though we might want to draw it towards a capitation are more often partial capitation in aren't, we are not thinking. but then -- and i don't know how to characterize this and percentages are anything. there are people kind of show up and say, you know, we are thinking down the road we might jump. but the senses that most of the people who are coming in and talking to us about this stuff, it's a different model then at least with the near term. that is the way it breaks down. just a quick brush. >> well, the plans are partnering with a variety, including the patients enter medical home's foundation. and we have patients that our medical homes now, so we are partnering with those physician practices, you know, private business as well as our medicare advantage business and we are

also a partner with the hospital the aclu types as well. so, you know, as part of our arrangement we will be incorporating those types of arrangements going forward. >> and it is -- i mean, i think the concept is interesting, but it is a challenge for a provider group to become a managed-care company. just think about it. basically need to transfer the actuarial underwriting capability of the managed-care plan down to the provider level to really make that a success. we do and of private hospital conference every year. two years ago all the providers, hospitals, and gung-ho. were going to take risk, because managed care companies. we don't need many more. this past year we did. in that direction is still the same, but the pace in the town is very different. they started this and it's actually kind of complicated. these companies have been doing it for a decade to five decades.

the idea that we could just come in and prices appropriately, i think, they realize it's a very significant challenge. they just don't have the infrastructure. and so i think the one thing that the plan is doing better this time around relative to the physician practice management issues of a couple decades ago was rather than plans giving rise to any provider groups that is dumb enough to take it, you know, they are starting baby steps. your number one is coming years your cost pressure appears to be loading you get a bonus. you go above it, that's okay. try better next year. year to is double sided risk and potentially at some point down the road you could have provided taking on full risk as opposed to jumping into it from day one. >> how milliken, a media. bipartisan letters from congress , more than 160.

the centers for medicare and medicaid services. how effective were these? >> the subject was -- >> well, the changes. the cuts that turned into increase earlier this year. >> you're talking about the update about what the assumption was with respect to the physician payment date. we felt that it was -- that cms should have always assumed that congress would fix the payment rate and then make your advantage update for several years. we rode to cms three years ago. that was a legal opinion saying that it did not make any sense to assume that medicare vantage would get a big -- that there would be a big payment cut to the positions that would be included in the medicare and vantage update which was cut

significantly. then you pay it back a year after. does not the way our contracts with hospitals and doctors are. we think it was very important that this year in particular when medicare advantage plans were facing such a significant cut to make sure that the payment rates reflected the correct assumption with respect to the physician fee schedule, that there would not be a kind of cuts that were initially put in to the fee schedule. as well as ten years, there has always been an assumption that in the baseline, doctor fees would be cut. congress has acted every year in that time to make sure that did not happen. so we were very supportive of the cms final decision on that. >> and that may have my timing of your little bit. the bipartisan support at the end of the day probably did not in that matter in the sense that all of this has come out of a

new one win. it seems like after the initial rates came out in february fairly shortly after that within a couple of weeks in a decision that there were going to fix the payment rates to the medicare vantage point. so the time the bulk of those letters came out the decision had already been made internally that they would give the plan some relief on a base payment. >> if they had been earlier we would -- would it have made more of a difference? >> it can hurt. part of it is to is sending the letters. the florida delegation is sending letters. of course they are. everyone in florida is on the medicare vantage mind. matters all little bit more who the people are and whether it's a non-traditional. >> we like to think the letters matter. how much to the matter is an unanswerable question. >> harvey sloane with the

medical education program. wonder if you can talk a little bit about primary-care physician recruitment. is that a problem? is a more of a problem with fee-for-service? with increased beneficiaries you see that as a base situation. >> yes. we believe we have been focusing a lot of our efforts on trying to increase primary-care to face a greater emphasis on primary care. that is why we think the patient centers. so critical. such a major foundation. it's a way of trying to improve care. and have not seen the numbers by the graduation rates and how many people are going into primary care. i know that working closely. in fact, some of the plans of actually partnered with medical

schools to try to give more graduation rates and more people going into primary care residences periods of that is a major focus of planned efforts across the country. >> again, this is just a little bit of subject. i think your question is also more brought. so an hour workweek survey beneficiaries every year for access problems. we have seen a lot of stability. to the extent that there is noise, its people working for a new primary care physicians. the commission has made a series of recommendations trying to rebalance the physician fee schedule in order to move resources toward primary care and away from procedural services. i won't take you through the gory detail, but that's something we are worried about. >> okay.

you talked a lot about the impact. so this question the you have or blue cross blue shield have to try to mitigate the increase. urging congress to repeal that tax for everybody. it's expensive. it's going to add significantly to the medicare advantage premium to individuals and small businesses. it s -- so we are working to try to -- is difficult because it saves the cost of hundred million dollars.

you have to find an of set which is challenging. plans are working to constantly tried seven work with providers. working on patients that there and medical homes. they're not medicare advantage. they're second year in a row to between half percent savings from their second year of their programs. and supplants across the country working closely in partnership with their hostels to rein in costs, employ better management techniques. but when you look ahead it's a clear tax to increase the cost to beneficiaries, both in terms of medicare, medicaid, the cost of medicaid. >> twitter some of the actions

of the plants' intake to reduce their cost of the beneficiary and? how are you changing what services are provided or what reviews are being done to beneficiaries? >> page plan will look at this situation that people may be increasing cost sharing. mailer to reduce benefits. more coordination with management, and you don't really want to increase cost sharing or reduce your benefit. he looked more efficiencies in your system. everyone will look at their own plan tried to be as efficient as possible, try to get the prices down that they're paying their hospitals and doctors. employ more coordination and management services. one thing you will see, not to what extent you will see in a couple of markets.

a couple of cases. maybe make a point. the company like united arab? just basically to be able to make the point next year. ziv he put us through this situation again there will be consequences. in 14 we exited the scab is a will to again. >> that's a major concern. we know what beneficiaries one is security and stability. as i mentioned, all the people are very concerned about the health care expenses because they are so significant. just last week there was an article in the post about the financial stability.

>> again, let me run an idea by you. the public policy officers. we have heard the ratings don't have a huge impact on beneficiaries. the star rating cut the rating for the fee for service and release on the report card with the ratings for the plants. would that make their ratings for the plans and more relevant? dr. miller, you may know how difficult that will be for cms. >> actually, we have a question to a lasting mark the comments of how you would compare quality in fee-for-service to managed-care.

>> to get this question. by would try to get off the stage. we did an extensive report on this. it is l. -- i'm going to say this is while struggling with the answer. the report is now of these three years old. so there are several issues. some of this goes to a one of the big issues. you have a different risk structure. their research suggests that. anything you put up there you have to be able to track through the differences of risk. does not a simple thank. the second issue you have. another issue that arises is kind of the geography. sometimes you say here's the plan, but the plan has reached

across many different markets. to truly make those comparisons, what you probably end up needing to do is comparing the plan in that market to fee-for-service verses the plan as an entity across many markets in the country. those are at least a couple of the challenges. then the report goes through in much more detail some of the differences in the measures and what would have to change in order to do this. this is an extraordinarily tall order and would be very expensive. when we put the report out it was a requested report to congress. these are the kinds of steps you would have to take. i only touched a few that i can remember of the top of my head. also cms would need to be given the resources to pull this off because it would be a very big undertaking. you're absolutely right, we think in terms of payment neutrality which i did not have time to say this.

were you all to believe want to be, managed care as an entity, i don't think this proposition is there yet. notwithstanding some of the research. managed care is a better quality product. payment should reflect that relative to fee-for-service. signal to the beneficiary should be, well, there is higher-quality. we definitely agree that this metric should be established and that comparisons between the two studies should be made. it's a tall order, and it was written up a few years back. maybe it will give you some to work with. >> and this question, you are a beneficiary. why should you choose and in a plan. >> we're lucky. we think people should have a choice of plans.

plans offering medigap. most plans also offer medicare vantage. people choose medicare advantage for the coordinated care they get. higher benefits. >> in your medigap plan the same way it does? >> it does apply. you pay a lot of money for it. you just can't charge for it in the medicare advantage program. there are additional requirements that are above what people get. >> and then for gretchen, the quality measures in the star system good enough?

>> we've done a fair amount of work looking at the quality star rating. i think as mark mentioned, they are comprised of a lot of different measures and pretty much most of the measures that are currently out there that could be used. so they are comprised of the measures, measure whether enough positions a during the appropriate test. also include the health outcomes survey measures. they also include the cab measures. they also include administrative measures. everything from the right translator sent to customer service. given that they include all these measures some have raised some questions as to whether not the needs to be a different

balance to the measure or some measures to be waited more than others. i think that it's still being debated and is still up in the air. they do include many quality measures. >> to you want to add to that? >> we have a question that came and directed to you, but it's not really fair to direct a completely to you. it quotes the medicare trustees' report saying that the medicare advantage plan did assumptions were lowered to reflect recent data suggesting the provisions of the affordable character reducing growth and cost by more than was previously projected. what is or are there recent data that was referred to? as i say to my don't want to hold mark responsible for what the trustees said, anyone on the panel who was to respond to that

should feel free. >> okay. you stomp the panel. well -- go ahead. >> gap. we have hard question. have exhausted the people at the microphone. almost. you should take the time while diane is digesting and reading this question out loud to fill out the blue evaluation forms of error in your packet for our edification after you're done. >> i would only say i think it is generated a lot of interest. in our last question that we will take today, some plans complain that they have been scored on some stark criteria before they knew what the criteria were.

is this a problem and is hhs working to improve this? >> we don't have anyone from hhs and the panel. >> i would say we always thought it should go through the normal notice and comment so that you know what other criteria are and there will be an opportunity to comment. that doesn't really happen. there's a lot of guidance today. you would like to see a more formalized process under way. >> is there any indication? >> not that we have. >> anyone in the audience from the department you would like to chime in on this they should feel free. or not. >> and obviously there is a lot of interest in being able to assess how well the beneficiaries may count. ..

another briefing we are bringing to you with the partnership of the kaiser family foundation next month on the fee-for-service cost sharing plan proposal that are floating around on capitol hill and elsewhere. so we look to deepen our knowledge about a different part of the medicare program. and i would just say thank you for keeping the conversation going in a very lively and

useful direction, and think that the causer family foundation for the contribution to making it a success and ask you to help me thank the fanal -- panel for a useful conversation. plldz [applause] thank you, it was very nice meeting you. >> you too. [inaudible conversations] coming up tonight on c-span2, a discussion on the impact of the health care law on insurance for young adults. that's followed by attorney general eric holder on his department's investigation to national security leaks. after that, the justice department special investigator on operations of the agency.

our guest is the former head of the congressional budget office douglas holtz-eakin. steven aftergood and joined by connie, a reporter with the associatedded press. how washington investigates itself. washington journal live on c-span every day at 7:00 a.m. eastern. the name of the place still resonates with the shoderring in the hearts of the american people. more than any other name connected to the civil war

except lincoln's getties berg reverberates. americans retain the knowledge of what happened here was the crux of the terrible national trial, and even americans who weren't sure what transpired on the fields know that all the glory and tragedy we associate with the civil war resides most indelibly here. the 150th anniversary of the battle of 77 getties berg v c-span 3. next a discussion about the impact of the federal health care law on insurance coverage for adults under the age of 2526. from washington jorn, -- journal this is 45 minutes. >> host: this morning on the "washington journal" we'll continue the look at the health care law, and it's effects. today we focus on young adults

under the age of 26. to talk about the health care law and for your questions. we have jonathan block, a reporter are "modern health care" to answer the questions. mr. block, first question for you. how are young adults impacted by the rules changes in the 2010 affordable care act? >> guest: perhaps the biggest change for young adults is specifically those under the age of 26. what happened is that a provision of the it has gone in to effect allows young people who are under the age of 26 to remain covered under their parents' health insurance plan. that's according to an hhs newsreel to have 6.6 million young consults under -- adults under the age of 26 covered by the affordable care act.

>> host: some stats we'll show for the viewers you can young adults are allowed on their parents' insurance up to the age of 26. they can be married, live separately from their parent, in or out of school, financially independent, and eligible for employer's plan unless in a grandfathered group plan. talk about that last stat there and explain it. >> guest: talk about the grandfather plan? >> host: yes. >> guest: there are a number of plans that do not have to abide by certain regulations. they are known by grandfather. they have abide by the regulations by 2017. >> host: for those using their parent's plan is there anything else to disqualify you from being on your parent's plan. >> guest: not that i know of. >> host: some other effect of affordable care act on young

people besides that change? >> guest: i think what will happen is one of the main purposes of the affordable care act is get americans under insured and a lot of people don't have coverage now. they feel they are invisible and feel they don't need to get coverage. just like everybody else who will benefit in the country from the aca young people are now guaranteed coverage of under the health reform law. >> host: and president obama, on friday, in san jose, california, talked about what this has dong done for young people. >> you have a wide array of new benefit, stronger cost control that you didn't have before and over time improve the quality of the insurance you have got. benefits like prepreventive care, checkup, flu shot,

mammogram, an contraception. you'll be able to get them through your insurance where they previously were not -- didn't have to be provided. protections like allowing people up to the age of 26 to stay on their parents' health care plan which helped 6 million americans including 6 million young latino americans. >> host: and in that video, the president said at the end there including 6 million young latino americans. that was the wrong number; correct? what is the right number. >> guest: according a may 2nd news release it's 6.6 million and includes all young people under the age of 26. >> host: we're taking your call in the segment. the phone lines are open. with have special line for those 26 and under.

mr. block will answer your questions for you. to the best of his ability in this segment. but talk about more about the enrollment of young adults and how the number has gone up a few more stats for you. this courtesy of hhs3.1 million young adults have been added. young men coverage has increased from 57% to 72%. young women coverage increased from 71 to 78 percent. what is our time frame 2010? >> guest: no. that's since 2011 because in 2011, that was when the provision that allowed young people and those under the age of 26 to be covered under their parent's health plan. that's only since 2011. >> host: and on that coverage, here is a chart from u.s. news and world report showing the

uptick in young people who are covered. ages 19 to 25, the chart shows the blue lines are the number of uninsured from 20102012. it was 31% of young people in 2010, and that dropped down to 21% in 2012. the table notes that young adults are so irresponsible for the overall drop in uninsured adult population in 20% in 2010 and 19% to 2012. they were only age group to report a decline. why most the young people? >> guest: i think it's most attributable to the provision. no other age group has a provision of the aca that has gone in to effect. >> host: we're talking your call with jonathan block. we'll start with stanley from

massachusetts on the independent line. your thoughts on how the health care law impacting young adults, stanley? >> caller: hello. why is that the 27-year-old who owes college loans has no job, what does he do? >> host: caller, that's a great question. someone who is age 26 or above that, they would have to get their health insurance on the health insurance exchanges that many have heard about. it begins in october 2013, and january 1st 2014. if you have a young person in the situation that the caller describe who'd is 27, they would be eligible for exchange sub industries, the way it works is based on the person's annual north income. if they are between 100 and

00% of the federal poverty level. i don't know exactly what it is offhand, they would be eligible for a level of subsidize. in states that have decided to expand medicaid, not every state has choose ton do that. if your income is up to 138% of the federal poverty level, you be eligible for medicaid. >> host: explain the changes for those who are unsure how it works? >> guest: an exchange is basically an online marketplace. some people have called it an amazon.com for health insurance, and that's largely correct. on october 1st, as i just mentioned, if you would like to get health coverage for coverage started on january 1st, 2014, you will go to your states' health insurance exchange which is online, you will enter in some information as far as your

age, income level, and other information. and it will give you a selection of different health plans to choose from. they will vary based on the what is the generousness of benefits, and you will have, for example, the plans called tiers that go from bronze at the bottom to silver, gold, and platinum. the differences have to do with different deductible and copay levels. on the platinum-level plan you would have a higher premium, your copay and dedeductble would be lower. >> host: you read a story recently on young adults on parents' policy impact these exchanges. the uptick in number of young people who are now on their parents' policy take people out of the pool that could be used to help lower the cost on the exchanges. explain that. >> guest: right.

the way insurance work, you have everybody who gets covered they are in a whole pool. the pool will include both young people who tend to be healthy and don't have that many medical expenses. then you also have a lot of older people who are in it who tend to have more medical issues. so the issue that i brought up in the modern health care article if you have approximately 6.6 million young adults under the age of 26 who are covered under their parents' policy, that 6.6 million relatively healthy young americans who will not be getting their coverage in the health insurance exchanges -- what that will do, you need to have a large number of healthy individuals, because the healthy individuals are the ones that essentially help pay for the individuals in the exchange who have greater medical needs. so without enough young people in it, the risk pool will be

off. it could possibly mean higher insurance premiums for everybody in the exchange. >> host: jonathan block has been reporting on health care issues for quite awhile now. where else have you worked? >> guest: i also worked previously at "atlantic information services" health replan week and a pharmaceutical employer working for many publication "fda news." we are talking about how the health care law is affecting young people specifically those under 26, we have a line set up for those folks that is 202-583-883. if you have a young person and have a question about how the health care law applies to you. give us a ring. we'll go to the republican line jeff from rapid city, michigan. you're on with jonathan block. >> caller: yeah. i'm listening to the communist

spreading propaganda add nauseam networking. there was so many promises made about obamacare. let's talk real dollars and cents. i'm a small business owner, we insure and pay the premium 100% for all of our employees and families, the premiums have gone up over 30% the last three years, 18% this last year, and now a plan we offered for our employees for 17 years is being questioned at the end of the year. they don't even know where we're going go. we carry the extra water for that grandfathered in you'll be able to keep your health care plan, you'll be able to choose your doctors, and for you guys to come on and talk about the 25-year-olds, you know, 25 is become the new 15 in this country. and people ought to understands

there's no such thing as a free lunch. >> host: jeff, do you think there's time to repeal the health care law here? >> guest: >> caller: it's obviously now the whole plan is just too bankrupt. the whole private health care industry. okay. and then we will all be forced on to medicaid, and my -- the other thing i support my citizens inlaws, and they have been driven off two different medicaids or medicare supplement plans in the last two years, as those have been closed down. this is what is happening. we're going smile and talk about how we're covering the kids who don't even want health care, and we're going drive the people who are carrying the water and paying for everyone else's right out of it. and -- >> host: jonathan block, give you a chance to jump in here. >> guest: that was a lot of

points bit caller. i'm going start off with the small business. the caller said he was the owner of a small business. i wrote a story in today's issue of "modern health care" and it deals exactly with some of the issues that he is talk abouts with small businesses. there -- one of the issues for small businesses is that they have to now abide by new regulations under the affordable care act, which includes called essential health benefits, which are a set of ten categories that every health plan must include. because of that, in many states, the cost of health insurance has been going up. another thing that is negatively impacting people like the gentleman and his business is there was supposed ton -- there are separate exchanges known as shop exchanges that were specifically for small businesses. those exchanges are separate from the individual exchanges i've been referring to before;

however, the -- pardon me. hhs is delaying choice in the exchanges by one year in the federally facilitated exchanges. i'll explain what it is in a minute. right now for people like the businessmen who just called, they are unable -- they're not going to be able to have choice if they're in one of the 33 states that is going to be either federally run completely, or in the state and the federal government will operate in a partnership. only 17 states will have state run exchanges. that means that the state will run all the exchange functions. >> host: let's go to brett from sound -- south bend, indiana. good morning. >> caller: yeah. i guess my question is -- i'm not young anymore. even when i was, basically any

job i ever had all my life, you know, you have to work so many hours to qualify, and then once you qualify it's fine if you keep working and this and that. then it runs out and you have a choice to go over this and that, bla. when it takes effect at 55. my legs are shot. i don't qualify for or have enough medical stuff to get proof of disability. if four years i'll filed for my social security and hope offsets the taxes i'm being taxed on the pensions that are independent unions. long story short, when it takes effect, i think -- i guess when i file my taxes they're going take money out or something to make sure i'm insured or anyway. what stops a individual who goes down and sitting down at the

hospital and running up big bucks because they are entitled and mandated to pay in to the system actually has never had half my life. nobody ever cared, all of a sudden everybody is caring. that's my question, and if i have to pay in to it, i mean, i never understood how insurance really works, because even when i was married, the wife would run the kids down because they were sick or, you know, you know, and two or three days you get over it usually and grin and bear it. >> host: mr. block, talk about the penalty issue and how it works. >> guest: what he was talking about with disability insurance. i'm not an expert at that. beginning in 2014 every american is guaranteed to get health insurance with a caveat if they

want it. if they choose not have it then they are pebblize -- penalized. the first year of the -- when the major provision of the affordable care act go in to effect. it's a relatively small provision. there's a fear that many health experts have brought up is that the penalty,ed at least in the first year, is so small that many people, including many young people, as i mentioned before are needed in the exchanges to balance out the risk pools, they just will say, you know, the heck with it. i'm going to go and pay the -- i think it's under $100 the first year. $100 annually for the first year. it will go up in future years, though. and say, you know, i feel young and healthy. that's fine. i'm going skip it and pay the penalty. so there is a real concern that a lot of young people may end up doing that. >> host: we are already seeing some of the effect of the number of young people on their

parent's plans here are stats from nbc news from emergency room visits. there are higher veesation rates to -- visitation rates to emergency room ayoung people. that's a 3% increase and the estimated it was about 14-7d million paid any insurers. who would have paid for the $147 million had the young people had not been on the insurance plans. . >> guest: the individual states. it's a big issue. right now if you are uninsured you have a medical emergency the hospital has to accept you if it's a life or death situation. what happens -- let's say you go the rear view mirror, you can't pay, you get treated. the state government has to absorb the costs.

frequently the hospitals have to absorb the costs as well. that's part of the aim of the medicaid pangs expansion and all the money to expand medicaided in the first three years 100% of the costs will be covered by the federal government that eventually goes down 90% of the state cost. these are only in the states that decided to expand medicaid. many states have not to go so. and the issue you brought up will not be an issue anymore. it may be an issue in states that have chosen not to expand medicare. >> host: a minute ago you were talking about the penalties that people -- everybody would have to pay. but talk about how the government is reaching out to young people to educate them about health care, and getting on health care plans before the penalties kick in. >> guest: sure, i mean, we have, for example, you showed the clip of president obama making a speech trying to appeal

to young people. i know, that secretary sebelius said the same thing. as far as specifically other than that i'm not sure, however, they have a website called health care.gov and opening up a call center -- and individual states will do their own outreach campaign. that will vary state by state. >> host: back in late may two new graduates joining them on the graduation and informing them about all be the benefits they will get from getting on health care plans. i want point to the article from med city news.

the make a 23-year-old care about health insurance. what do you think? >> guest: i've heard the argument before it's difficult make health insurance sexy. i don'tcare -- i'm not sure a lot of people would care if you put it in an app, whether you make it, you know, you try to be more tech savvy with health insurance. they think they are young an invincible. it's not the sexy topic to talk about. even though i enjoy covering it every day. >> host: a question on twitter brings up the fact maternity care is one important issue health for young people. mark asked what items must be in all health care plans. i heard the new law mandates individual health plans cover maternity care. >> guest: that's correct. it goes back to the ten

essential health benefit areas, unfortunately don't know off the top of my head. i can tell the person who just filed that tweet, that maternity care is included in that. >> host: go to louisville, kentucky. >> caller: [inaudible] have on health care. the reason i ask this i'm retired now. i don't have a -- i take to and from a public health plans in louisville. they are run by the local government. i take -- [inaudible] a couple of weeks ago with three waiting to see the doctor, and i countedded about 18 illegal immigrants in there. i know, they are illegal most of

them spoke spanish. a couple were speaking a couple of languages. i speak spanish as well as italian and french. i knew what they were talking about. they were all illegal. i started talking to them. and one of the social workers told them not speak to me. >> guest: what is your -- [inaudible] guaranteed coverage unless you do have legal status. to my knowledge, illegal immigrants are will not be able to gain coverage under the aca. there may be other programses that are available to them through local social service agencies, private organizations, that sort of thing. under the aca, you have to have legal status in order to qualify, i believe. >> host: we have a adam.

>> caller: good morning. i have a general question, and a comment. my question is regarding h's a accounts i currently an hsa. i'm 27 and just turned 27. i'm off that range, but my wife, which i'll get it to scare in a -- will there be any impact for hsa account for younger folks be able to contribute as we are now. it's greatly beneficial very young or old. and my comment generally is i think it's important you made this point as well that most younger folks are not going pay for health insurance. and, you know, we have things

that happen. i personally shattered my elbow at age 2. it was over $40,000. i wouldn't have been insured i had not been working full-time. .. you contribute and your employer will contribute money to it so that covers both the cost of your health care as well as the cost of -- when i say health

care, i mean premiums, as well as any medical expenses you may ring up. i believe that hsas, will be even more popular under the aca because they will be some of the most affordable plans out there will have the lowest premiums and as far as the aca impact i do not foresee a major impact on the high deductible health explains may actually help boost these plans. >> host: more questions, two of them at once. the idea of the penalty. don writes: if i can't afford the pent die go to jail? >> guest: no, he does not go to jail. if you're under a certain income level, you do not have to pay it. >> host: and mark says if you paid the small fine and go to the e.r. whenever michigan happens how is that lowering costs. >> guest: a very, very good point april. not lowering costs, and that is actually an excellent point that

i never thought about before. but the caller is right on the money. what's going to happen is, say, somebody pays the penalty, they have an million. they then go to the er. if they cannot afford to pay it, then again the hospital has to absorb it. so, that's an issue. hopefully it won't be that big of a issue, but only time will tell. >> host: back to the phone. jim from arkansas on our republican line. you're on. >> caller: in morning. i have a couple of points i want to make. since 2007 my wife has taken four tests, and i haven't had a raisins 2009. last year, our insurance went up 15%. this year it went up another 10%, plus our copays and deductibles went up considerably. this is supposed to be an

affordable care act, yet it's costing us to have to pay much more. i'm not going to let the government pay for my insurance. i was taught not to do things like that. but i just want to know at which point i'm going to be able to fix my budget so i can afford it. >> guest: greatey from the caller. i have heard this concern from many people before that they're seeing from 2012 to 2013, now many of the insurers are getting their rates ready, they've actually filed already with the state, that the state insurance agencies, and it's really been a mixed bag as far as what we have seen so far for 2014. every year health insurance goes up simply because, like everything else, costs go up, but the question is, for 2014 -- again, we're seeing a mixed

bag -- is are the health insurance premiums going to go up, and if so, are they the result of the aca? and a number of states, they have gone up and so, again -- but we only have 10 states that have reduced their -- where the insurers had to get approval from the state regulatory agencies but a number of the states, private insurers have asked for insurance rates that are 10, 20, even read somewhere where it as over 100%. >> host: a special line in this segment for those under 26. if you want to talk to jonathan block of modern health care reporter. robert is on the under-26 line. >> caller: hi. i was wondering, is the aca --

as it's negatively impacting fulltime employment for youth under 26 with that provision that fulltime employers -- fulltime workers receive health care from their place of employment? >> guest: another great question. what he is alluding to is the fact that if fulltime employers have to buy health insurance, which is a mandate under the aca if they have 51 or more employee, will that have a negative impact on hiring. there have been a number of statistics from business organizations that say, yes, it will, because of the added expense they have to incur in order to provide coverage. we won't know until we see it but i've seen some statistics from business groups that say that will actually happen, that because of -- because businesses have to provide -- businesses

with 51 money yesterday or more have to provide coverage, that may have a negative impact on their ability to hire. >> host: on the under 26 line, donovan from michigan. donovan, good morning to you. you're on with mr. block. >> caller: good morning. >> host: go ahead. >> caller: my question actually -- more of a comment actually touches upon the last caller's question or comment, which was that employers -- one of the negative outcomes of employers having to provide health insurance for employees that work over 40 hours, or employers have to provide health insurance for employees that work over 40 hours if they have 51 employees or however that was framed. is that -- not only does it affect hiring, it also affects the employees already working for the company.

what i've been experiencing for the past year is employers who are not scheduling employees over 40 hours, which leaves me will having to go out and several of my coworkers, will having to go out and find several jobs in order to pay bills and whatnot. and i mean, it's -- it's kind of already adding to a big problem amongst the young people when the unemployment rate is so high amongst young people in the country right now. >> guest: he makes a very good point. a number of businesses, to try to avoid providing coverage because they're trying to run a business, they are cutting down hours so that those employees are not considered fulltime and therefore they wouldn't be able

to get coverage under the health exchanges. >> host: don serena, what kind of business are you in? >> i'm in the food -- i'm a server for a restaurant, i guess. >> host: something you're seeing in your industry or seeing it in friends in other industries as well? >> caller: well, i've actually worked at a couple of different restaurants over the past year, and pretty much every restaurant i've gone to, this is four or five different restaurants, it's pretty much standard right now to not work employees over 40 hours. >> host: mr. block anything illegal. >> guest: no. it's not. i want to make one point again. the story i wrote in the issue of modern health care that came out is that most small business owners realize it's good business to provide health insurance. they're not -- i think that most of them, if they are doing what the caller said, they're not

doing it out of greed. they're doing it simply because it's the bottom line. and if you read the article you can hear some small business people who talk about that. >> host: and it's modern health care.com is the web site, and you can follow mr. block at mhjblock on twitter,@mhjblock. a couple questions for you from twitter that are coming in. this one from tillman. isn't the aca a wealth transfer from middle encloses to the poor plus college kids? >> guest: wow, that it is a loaded question. i really don't see it as that. that a very politically loaded question and prefer to not answer that if that okay. >> host: talk about the u.s.a. today story that came out earlier today year, talked about some of the specific parts of the healthcare industry that are

particularly important to young people. mental health and substance abuse, a few areas we into young people using the healthcare system. how that the affordable care act changed those two areas. >> guest: a lot of health plans today, the coverage for mental health is not as strong as it is in other areas. of course are there some states that have mental health parity. however, it's really for many -- i'm not saying all plans but many plans today, the mental health benefits are not as rich as they could be, and so one of the things the aca is doing is they're really putting in provisions that really bulk up mental health and substance abuse resources. so hopefully in the future young people, or anybody for that matter, who has mental issues or substance abuse, they will get the care they need.

>> host: back to the phones. rod is from plainsfield, indiana, on our republican line. good morning, rob. >> caller: hello? >> host: go ahead. you're on with mr. block. >> caller: what is the biggest gripe or one -- from the insurance companies? that's one of the group that we never hear from and i didn't know what their biggest gripe was, and also, along with that, had to do with executive pay, executive bonuses for the insurance companies, how will that be reduced in order to pay for all the health care coming down the line? >> guest: let me answer the second question first. the aca has nothing to do with health insurer executives compensation, it has nothing to do with that. our magazine very recently, in the issue that came out today which i keep on mentioning -- has done analysis of not only for health insurers but for

other companies that are in the healthcare field. you can, again, look at that at modern health care.com, and the first part of the question? >> host: go back in there for us. >> caller: i almost forget -- oh, yeah, what were some of the gripes -- >> guest: oh, yes. >> caller: guess the aca, if they do. sounds like it's mandated profits for them. thought obama worked for the middle class. >> guest: right. good question. they were very supportive of the affordable care act. and i think the caller eluded to the rope why health insurancees so costly and the reason is because of claims costs. there's also an issue with the way that our -- the way the payment system works in this country is that frequently the prices are products -- can vary

vastly from hospital to hospital. so you could good for, let's say an appendectomy in one hospital, $10,000, across town could be $5,000. >> host: george now from west virginia on the democratic line. george, you're on with jonathan block. >> yes, good morning. what i'd like to know is, with this obamacare and everything, when it first came out, nancy pelosi was on national tv and says, well, let's pass the bill first and then sit down and read and it see what it's going to do and all that. and few we find out that everytime it goes in, something takes into effect, it's going to cost me more money out of my pocket, plus everybody else. you can't get the service in the hospitals or the doctors. the doctors are not accepting it. plenty of -- i know three or four doctors say they will not accept obamacare or anything like that. i was wondering, if a group of ordinary citizens got together and got a petition and everything and sued mr. obama

for lying to the american people about the obamacare? can we bring that to the supreme court and sue him for lying to the american people on obamacare? that it was going to lower the prices, wasn't going to go up higher or anything like that? and yet healthcare, obamacare is going up, up, up. >> host: can you talk about the current legal status of the affordable care act? >> guest: yes, as we know, exactly year ago, the constitutionality of the law was upheld by the supreme court, so obviously it is still in effect on capitol hill, which is right next to us, there have been, i believe, 37 efforts, including one a few weeks ago to try to repeal the law, and the house passed but then failed in the senate. as far as the lying, i'm just a lawyer but i don't think that would be a supreme court issue anyway. >> host: we have that line for

folks that are 26 and-under. joe is on it from knoxville, arkansas, in morning, your on with jonathan block. >> caller: good morning. i want to say thanks for helping kind of clear the water a little bit for me on this. very helpful. when you watch mainstream media, which this is a main stream network, but you hear a lot of the spin and you hear a lot of either people that are really pro aca or negative. you don't really hear a lot of people, like, yeah, at it okay. people have very vehement opinions. so thanks for that. a couple questions. obviously people have kind of been commenting on the employment numbers being skewed, more people are going to have to get a parttime job, obviously, or another parttime job when

people get their hours cut a because that's going to happen. but specifically pertaining to that, what would keep someone that -- i know it sounds shady but a lot of employers will do whatever they have to do to stay in business. what's to keep them from cutting the people's hours from 40 to 39.5? >> guest: theoretically, nothing. however, again, there is -- there would probably be, i think, some sort of a public backlash against that. also, there is a provision that if a -- if you have 51 or more employees, let's say you don't cut their hours and you don't provide health insurance, to your employee, then you get fined $3,000 per employees. however as the caller points out, some unscrupulous businesses may try to do that. in fact they may not even be

unscrupulous, they may utry -- smaller businesses are trying to get by, and that's one way they may see fit to do so. >> host: let's go back to the under-26 line we have. vincent is here in washington, dc. you're on with jonathan block. >> caller: thank you for c-span. there actually is regulation touching on the employer that are trying to reduce workers' hours. the way this is going to be calculated is using full-time equivalent employees. the other thing i wanted to kind of touch on is, from what i've been seeing, i just got into health insurance myself. looks like insurance plans are going up because of switching from the group model to an individual model, the subsidy placed on it and i think they're going to be seeing a lot of larger employees, maybe subsidizing their employees to go out and buy it on the market

because they can get it cheaper and will provide the same amount as providing insurance. >> host: talk about the full-time equivalents. >> guest: that gets into also untile gritty. i can't go into that many detail but it's the way that the federal government will figure out what qualifies as a fulltime employee. and technically you could have somebody who worked less than 40 hours and still be qualified. there's a formula. it's complex. but that is the way that the government will decide whether your business -- whether you have a fulltime employee. >> and steven is up next from grand rapids, michigan, on our republican line. good morning. >> caller: good morning. >> host: go ahead. >> caller: my question is, whether your 26 or above, what if you have an arrangement with your primary physician where you have a monthly direct pay, for

example, i pay 50 tuesday a month and that giveds me full access to my doctor, yearly physicals and -- and -- but i don't have insurance. how will that affect that situation? >> guest: great question. there was an article in the banger daily news in maine about a doctor that is doing exactly what you mentioned. he will not be taking insurance. people will -- he will charge a fair rate where he makes a small profit to help cover expenses, and the only question is whether other individual physicians will follow in that model. i have not heard of very many but who knows. >> host: jonathan block is a modern health care reporter. you can see his work at mod health care.com.

>> attorney general eric holder testified last week before the senate appropriations committee about the justice department investigation into security leaks. this is in response to reports that the attorney general approved the screening of e-mail and phone records of a fox news reporter. this is an hour and ten minutes. [inaudible conversations] >> commerce, justice, subcommittee now come to order. today we take the testimony of the attorney general of the united states. the committee wishes to welcome the attorney general, and we know he will be testifying on doj -- the department of justice's budget, it's priorities for fiscal year 2014, and also the impact of

sequester, this year and next year, in terms of the impact on the department of justice, its mission, because of its impact on its employees. later we'll also be listening to the doj inspector general, michael horror witness, testifying for the first time about oversight in terms of management issues. we're doing this by everyone his -- we invite the inspector general to come so we have a better sense of how this committee not only spends money but how we can be a more frugal. a more efficient government and get value for the dollar. we'll discuss how the justice department's 2014 budget strengthens non security and counterterrorism, protects the safety of the majority of the rights of citizens, and how the

department insures that it uses taxpayer money wisely. the department of justice enforces and defends the interests of the united states. public safety against threats, foreign and domestic, seeks punishment of the guilty and providing leadership and preventing and controlling crime and ensuring fair and impartial administration of justice for all americans. that's a lot. employs more than 115,000 employees. 26,000 of them are federal agents. the fbi. dea. u.s. marshals, atf. we have over roughly 20,000 prison guards and nearly 10,000 prosecutors and investigators and legal experts. we get a lot for what we too -- we have asked them to do. the u.s. marshals eave have arrested over 12,000 fugitive sex offenders, 12,000 sexual

predators were taken off the streets because of the aggressive work of our marshals. dea put 3,000 drug trafficking organizations, not people -- out of business, and the fbi dismantled 409 criminal enterprises. the u.s. attorney collected $13 billion in criminal and civil penalties, going, again, after the bad guys them garps of our justice system, and we -- the guardians of our justice system and we want to make sure we let them know we value them. so, mr. attorney general, when we turn to you, for all those people who work at the department of justice, administering justice, protecting america and its constitution, we want to say thank you. and now, we have many agencies with many wonderful accomplishments and i'll put those into the record. we ask a lot of the department of justice and ace we look at this year's budget we know that

the department of justice has a request from the president of $27.6 billion. we also know that in fiscal '13 we enacted a 26.8 billion and then you face the sequester, which took the entire funding down by almost a billion-five, to 25.3. those are numbers but, wow, they must have had just a tremendous impact, and we're going to move forward to hear about that impact. for us, we look to our community security, national security, oversight and accountability. we know that for you highlights, we know there have been limited bus targeted increases in gun violence, requesting 1.4 billion, 379 million over 2013 request, to keep our home schools and communities safe.

i'd like the fact that we want to help states improve the quality of criminal records and also mental health records. allow schools to hire school safety personnel. and train local police on how to respond to these threatening incidents. we're the fact i consider the new war is the threat to sign-under security, and doj has charged cybercriminals and a $45 million atm heist. why rob a bank when you can do an atm heist. there's a growing nexus between organized crime and nation states out. nation is what leon panetta called a digital pearl harbor. we know the justice department is requesting $668 million for fbi agents, computer scientists, federal prosecutors, on the issue of cybersecurity. and we look forward to working with you about that.

there are many issues facing the budget. one is that this is -- is federal prisons. the bureau of prisons requests close to $7 billion. we have added 32 new inmates for a total of 224,000 people are in our federal prisons. 224,000 people are in the federal prisons. a stunning number, and it is requires a lot of protection. we are concern -- our concern is keeping the bad guys off the street. we need to deal with the prison situation and also look out for the safety of our prison guards. we want to strengthen national security and we will be talking about that as we move along, but we also know that for state and

local law enforcement, this is an area of great concern because we know the department of justice, the fbi, the joint task forces, the way our attorney -- u.s. attorneys work, it is through state and local. there's a request of 2.3 billion for grants, to be able to support the investments in that effort. we look forward to hearing more about that. we also look forward to hearing from you in terms of how we can achieve the savings and get a more -- as i said, -- we want to have a safer country, we need to have a smarter government, in terms of how we use our resources, and yet at the same time we want to protect all american people. i'd like to turn now to senator shelby. >> thank you, madam chairman. welcome, mr. attorney general. today we will hear from the attorney general of the united states, attorney general holder, about the department of justice and its 2014 budget request. we will also hear from the

inspector general, michael horwitz, who has taken a very active oversight role within the department, as he should. first, i want to take a moment to recognize the men and women, mr. attorney general, of the department of justice, who protect this country from crime and terrorism. they work hard to keep us safe and for that we all owe them a debt of gratitude. the 2014 budget request for the department of justice totals $28.000000000. a 3.9% increase over the 2013 enacted level. that increase, however, comes largely in the form of funding for new gun control measures, while the majority of law enforcement accounts basically remain flat. the budget also proposes a number of gimmicks to find additional so-called savings within the department. i believe this approach is

misguide, mr. attorney general, and look forward to working with chairman to put the department's budget on the right track. the budget also proposes to remove language that prohibits the transfer of gitmo detainees to u.s. soil. this provision received broad bipartisan support last year, and i'm troubled by the administration's recommendation that it be removed. the proposal is particularly discon -- disconcerting in light of the re declare racing on may 23rd to close guantanamo bay. aside from his broad declaration about the closure of gitmo, the president has made no specific proposal for dealing with current detainees. the president has not even attempted to remove those detainees, his own administration has determined

can be returned to their own country. the budget proposal leads me to believe the president is planning to move the gitmo detainees here to the united states. why else would the budget delete the transfer language? either this is a real proposal or it is a political posturing. ...

>> as head of the department of justice it is his responsibility to ensure the laws are enforced in the interest of the united states in mayor defended the controversy embroiled of the department is called into question i believe its ability you to ferreted minister law and justice. the questionable actions of the attorney general have tarnished the integrity and impartiality and efficacy of the position of attorney to rojas. i believe it is the responsibility of this committee to ensure the department of justice can efficiently and effectively in force fellows to

administer justice it is a responsibility of the department of justice to ensure it carries out its duties and it is responsible and responsive to the citizens of the united states and it operates with and tolerates no less than honesty and integrity. unfortunately i believe until these issues are resolved and the controversies surrounding the justice department and the attorney general's office is laid to rest rest, distrust will hover over the department of justice. it is my hope they will move swiftly to address these issues that have been raised not just by me but others baja to put them to rest in the full and open matter so the department can get back to focusing on the issue central to its mission. thank you madame chairwoman.

>> mr. attorney-general? >> good morning to distinguish members of the subcommittee. i appreciate this opportunity to appear before you today to discuss the 2014 budget for the department of justice to provide the overview. thinks to my dedicated colleagues, nearly 116,000 employees serving in offices around the world the department has made progress to protect the safety and sacred right of the american people. nowhere is this more clear than were working regard to ensuring america's national -- national security we have brought cases and convictions and obtain senses again scores of dangerous people on terrorism related offenses by a relying on tested article three course system to identify and investigate and disrupted numerous plots by foreign terrorist organizations as well as by

homegrown terrorists. moving toward real continue to remain vivid -- diligent to take these comprehensive efforts to a new level. to this end the budget request over $4 billion to respond to events of the horrific attacks on the boston marathon as we continue to investigate this manner i will assure you my colleagues and i are to be held accountable to the fullest extent of the law for those responsible for the heinous act and those who all terrorize our cities. while the department of justice must not waver in its determination to protect national security you must be just as vigilant of our rights and freedoms we equally obligated to protect including the freedom of the press. in order to insure the appropriate balance at the president's direction i have launched a review of

existing justice department guidelines and vet -- and told reporters. last week i had the first to of a series of meetings with other groups and news organizations and government agencies to strike the balance to ensure protections and to foster a constructive dialogue. i appreciate the opportunity to engage members of the media and national security professionals in this effort to improve guidelines, policies to renew the important conversation that is as old as the republic itself to balance security with civil liberties. as part of that conversation let me make two things clear. first, the department's goal to investigate leaked cases to identify and prosecute government officials to jeopardize national security by violating the oath. not to target members of the press or to discourage them

from carrying out there vital work. second, the department has not prosecuted as long as i have the privilege of serving as attorney general, will not prosecute any reporter for doing his or her job. with these guiding principles we are updating our internal guidelines to ensure that in every case the department's actions are clearly inconsistent with our most sacred values. to make clear i think it is within our guidelines and regulations, now with the people of the justice department who have been involved with these matters. this conversation is not static and seldom has consensus and is often difficult and the emotionally charged requires both parties to approach the delicate issues in good faith so today's leaders and journalists and concerned citizens from all walks of life can come together as our predecessors have done to secure our freedoms come

ensure the safety of our citizens to update and refine key protections in a way that is commensurate with the technology of a new century and consistent with the most treasured values. in addition my colleagues and i remain committed to working with members of congress to secure the passage of common-sense measures to prevent and reduce gun violence. the president's budget request provided 300 and $85 million to support the efforts to allow us to keep our promise to the families and communities of those senselessly murdered at sandy hook elementary and callous other acts of gun violence throughout the nation. we will also continue to advocate for comprehensive immigration reform to strive to improve the system in a way that is fair, guarantees all are playing by the same rules and responsibility from everyone including those who are here in the undocumented status, and employers to exploit them.

i am encouraged the basic principles are reflected in proposals under currently under consideration by the senate and a look forward to working with leaders of chambers of the congress to implement responsible reform legislation. in the meantime the justice department will move aggressively and appropriately to force it existing laws to safeguard the most vulnerable members of society to ensure the fairness and integrity of our markets and to invest in strategies for becoming smarter and tougher on crime. think we can be proud of the progress this department has made and i am encouraged to note the president's budget request includes the resources we will need to continue this important work including an additional $25 million for the executive office for immigration review to augment staffing and improve the efficiency of the courts

and 2.3 billion dollars for state and local tribal assistance programs with a focus on funding of evidence based come increase of 55 million to combat financial and mortgage fraud, an additional 93 million to address cyber security needs and an increase of $7 million to expand on the historic achievements of the civil-rights division to address by a/s and discrimination. the ability to continue this progress has been negatively impacted by sequestration which cut over one plane $6 billion for a long dash from the current fiscal year. earlier with the help of this subcommittee are provided $150 million to mitigate the effects of these on tenable reductions to avoid the furlough of more than 3500 correctional staff each day from those around the country. in april with your support using similar authorities

negative put funding to the u.s. marshals service and other components to prevent furloughs to maintain adequate operations. i want to thank the subcommittee for your full and immediate support of these actions and they could not have occurred without your assistance. but i must stress that these and similar solutions and no longer be available to alleviate fiscal year 2014 shortfalls due to a committee reductions should they be allowed to persist. so we will prevent this from occurring to secure a timely passage of the budget request which has a total of $20 billion for the justice department and that level of support is essential to ensure my colleagues and i have the resources we need to fill all our critical missions. i thank you for the chance to discuss this with you today. i would be more than happy to discuss any questions you

will have. thank you. >> thank you. mr. attorney-general we will go to the five minutes rule and senator shelby in the order of arrival. there are many questions to be asked because the department of justice has such scope and incredible mission. my first question relating to what i consider the explosive situation is the federal prison. i am very concerned about the rising population with the fact of prison overcrowding, the fact that right now litter the a federal prison budget is making 25% of the entire department of justice budget and it keeps increasing year after year. with the federal law enforcement, competency of the u.s. attorney's offices we're getting convictions of bad people. that is a good part but the other part is 224,000 in

prison i worry about the safety of the guards. i know you do too, mr. attorney-general, t hat we are on a fiscal unsustainable path and i want to ask first about you feel your request of six point* $9 billion, which is again, a 25% of your budget request is adequate to meet the needs of the ethical standards of the prisoners and at the same time protecting your guards and you have thoughts on how we can reduce the prison population without adding grist to the american people? we worry about get well and i know it is a big issue but i sure cory was going on in the federal prisons here. i have a top-notch one in maryland so can we hear your

thoughts? >> i share your concerns that many we have requested i think will support and allow us to wrote -- run the system an inappropriate way to handle the growth of the population to finalize the of two new facilities one in new hampshire and alabama and also bringing on activation one negative activation of three other institutions to increase capacity and adds 2,087 positions including 986 correctional officers. there we have a life-and-death issue we have to have sufficient numbers of correction officers to ensure that we have adequate numbers of people who can be deployed battle may to maintain order but to protect their fellow officers but i am confident at this level that we have sufficient amounts of money to take on that capacity and the additional officers.

>> again we do have ethical standards with our guards. but with a population of 224,000 prisoners, how many of those are repeat offenders and the recidivism rate? >> their recidivism rates i think runs at, i am not totally sure. may be slightly lower than 40% in the federal system and the state system. one of the things we need to do is focus resources on reentry programs and rehabilitation programs while people are imprisoned to make more effective our efforts to reduce the recidivism rate. >> mr. attorney general we now have the immigration bill but i want to come back to this because i really

want to keep america's streets safe. at the same time, the administration of justice is now going to be ever increasing. we cannot build our way out of prison. and i am for tough and vigorous law enforcement and prosecution but what i am asking you is, did you have within your established within your department how the management mechanisms to look at how we can reduce recidivism and water the other tools and techniques to look at stabilizing or reducing the population without increasing risk to the american people on the streets because if you go 25% they can go 30 percent. we have other things to do that the justice department still make the point* you make is a good one not only to focus on manage the

existing system for those incarcerated but also on prevention activities so we reduce the number of people coming into this system. and that regard the office of justice and delinquency prevention, we have a variety of things that we do. >> but i want a plan. here is the plan. let's look at the prisoner as a prisoner they have done bad things, so bad that they are in federal prison. i look at this continue on which is a vicious circle. what do we need to be funding for the prevention programs then what happens when they are in our care and custody that begins to change them there for when they hit the streets again so they are not heading up our people again and back in the same prison. what are the programs?

so when we do have sending we're not only finding the present but also a continuous services to prevent people from becoming this dead end and what are some of the of their programs we need to do? we need to look at this with the scope of the committee and your a vice what the numbers should be so we begin to tackle this as a humanitarian concern, public safety concern on the streets, a mutual dear friend of ours has spoken the cradle to prison cycle. this committee wants to be a partner with you on a bipartisan basis to begin to break that. and you are in those neighborhoods like me. we're spending more to keep a person in prison and sending them to school or higher education. let's look at that continuum and work together. >> and want to work with you

on and the way in which you have stated it is right to look at prevention activities, rehabilitation and also reentry. i also think we need to ask yourself tough questions about the enforcement priorities in the department and the way we have been forced the of laws and the collateral consequences of those activities. i will be making proposals later in the year about rethinking the ways we have conducted criminal justice system prosecutorial efforts >> thinking madam chairman. mr. attorney general, the department as we all know how is mired in the controversy of late and it began of the reports of telephone records of 20 ap reporters and editors followed by revelations of a department alleged espionage investigation of fox news

reporter james rosen and culminated in questions of the veracity of your testimony before the house judiciary committee. these issues led to members of the public to question your appearance to the rule of law in your ability as the attorney general to lead. these controversies i believe are a significant distraction for this department and have led to calls for the investigation of your actions and those of your department. others have called for your resignation. mr. attorney general, i hope you would agree that we have the department of justice is a full-time job and i thank you would also agree these controversies have a permanent destruction and for you as the leader. i hope you would agree the american people deserve an attorney general who is completely focused on the fair and impartial ministration and not distracted by controversy of

his own making. i have observed effective leaders from time to time to subject themselves to sell the evaluation process in hopes of improving performance. how could you mr. attorney-general, evalua te your performance to date? is there any room for improvement? have you or will you take action to move the department beyond this controversy to ensure that similar missteps will not continue? >> first i want to assure you and the american people that in spite of the recent controversies that the department is fully engaged to protect the people that are unique to the department and also that they know i am fully engaged with the regard. i go three self the vibration process almost on

a daily basis. i have not done a perfect job with think it is a good job but i always try to do better. some of the criticisms levelled or thrown at me and the department has caused us to rethink the way we deal with the immediate increase and we will make changes that is one month of the reasons rearing cage with the process so that we can formulate new policies, new regulations and hopefully get that behind us. >> i believe mr. attorney general, i hope you agree that the american people need to know the of the restoration of justice is in the hands of a dispassionate and capable leader. with the will continue to be the chief law-enforcement officer of the federal government is a decision for you or the president to make. i am interested to know what criteria you reduced to

determine if you would continue to leave the department. what is the tipping point*? you will clear up this controversy or hover over us? which is very important to the american people. >> the tipping point* might be fatigued and you get to a planet where you just get tired. >> there are certain goals set for myself and this department were i step into a 2009 right could accomplish the goals that i said i will sit down and do will talk about a new attorney general. says ibm not to a person, the honor of my life that i also have such respect that i want to make

sure it operates at peak efficiency and i am proud of the work they have found andrews of leadership bedtime to come to step down i will do so. >> but the belief and the integrity of the attorney general and justice department is essential to the well-being of this country, is it not? >> it certainly is. >> thank you very much madam chairman. i would like to respond to that last comment to simply say that i believe in your integrity. i believe that you are a good attorney general. i thank you had done to problems -- unto problems hard to anticipate and respond to the best you

could and i just want to say that because candidly i don't like to see this hearing to be raped you but let me ask you this question i chaired the senate caucus on narcotics control and reissued a series of reports and we just issued one on money laundering. and what has come to my attention is there is substantial failure of sun united states banks to comply with any money laundering laws which few were drug-related violence for example. and to allow for six and 2 million in wire transfers and over nine point* 4 billion of physical money to enter the united states from mexico on monitored. of that many we know at least a hundred 81 million

of mexican drug proceeds enter the united states illegally. on december 11, 2012, they entered in a department of justice but paid 1.2 billion in finds this a movie taco villa agreed to pay 160 million to settle charges that any compliance program and they labeled to entered to exit -- mexican drug money. 1.9% billion of finance is huge but the question i have is to you believe that these fines are going to change what has been current practice? and i suspect other banks are doing the same thing and this is an enormous gap in

our infrastructure with respect to allowing drug proceeds to be monitored right in our own country could you comment on that? >> i think we are being appropriately aggressive in the enforcement efforts to come up with proportional financial penalties that we can never get to a situation where it is the cost for doing business where a bank can simply pay a huge amount of money to think that is the way to of solve itself from wrongdoing. we also put them place compliance measures with mediation, composing monitoring to make sure these things don't happen began. the sanctions go well beyond what a judge would be able to do if it were decided in a courtroom in a more traditional setting that is not to say we should not hold corporations criminally

liable ann arbor we can to hold individuals liable for this activity. >> this is a recommendation of the drug caucus the individuals are held responsible when it is over to an do diligence is not done. i thank you for that response. there was an old ig report on the gun dealer program that i believe mr. horowitz will carry out and it found 58 percent of federal firearms dealers had not been inspected within the last five years and you cited three reasons understaffing, a large geographic area and 16% increase of gun dealers

please ring 2004 and 2011 he has money to enhance the enforcement efforts to strengthen inspection. we very much hope now to get a director of that unit the judiciary committee has them coming before us and they project of this allocation would fund a 60 additional inspector positions you reported you would need additional 199,000 to inspect all dealers if and a five-year period and feel divisions told headquarters in 2012 they needed 504 more investigators. the federal firearms dealer, in my view is what makes any legal gun sales possible in the united states because they require

certain material with that 58 percent figure is a distressing. what you believe these additional inspectors could do to increase the 58% and two you have to what level that there would be inspections of federal firearms dealers which said the five-year period? >> i do think we could do that. the organization has ben resources start for a great number of years without a senate confirmed leadership. it has also suffered a and i think the concern they you raise to do these inventory at the prescribed level will give us all greater comfort to have an impact on our ability to monitors had been

trade some of that only the appropriate people have access and totally respecting second amendment rights in keeping hand said that people that should not have them but there is no way to tell when the theft has occurred for federal licensed firearm dealers or to put up warning signs we have to be on the lookout. i am confident if we get the money we asked for and tom jones is that we can change the situation to make people more save. >> this is important to me and i appreciated if the emphasis could be placed in that area. thank you very much. >> thank you madam chairman. mr. attorney general, it troubles me that the

president has virtually un reviewable, unfettered authority to order the killing of any american citizen overseas who is suspected of terrorist activity without any kind of charge or trial or judicial review. we have all read this morning of the controversy over the nsa having access to phone records of american citizens. it seems to me and american currently receives a greater degree of due process protections from the judicial branch so on his own conversations to get information about it then

that doesn't make sense to me. how was it propose to congress, a process that would said it independent of the judicial review for a lethal strike against a u.s. person overseas. either an expansion of the fis accord toward different classified proceeding to be sure there is some type of judicial review rather than that authority to take an american life i am talking about overseas only by the president. >> with all due respect i would say it is incorrect to say it is only that the

president has some limited authority in this regard. with the use of drones and we're talking to me more transparent. i said to a letter to the chairman leahy to make our efforts more transparent in this regard we operate under the statute that congress passed for the use of military force and when we're dealing with these matters try to focus on capture where possible if the threat is imminent also operate under the rule of law. and as the president said in his speech, people cannot plot against the united states people cannot kill american citizens been used as a shield their american citizenship these are steps that we take with great care and the most difficult of decisions that we have to make there the things that keep me up that night as they think about my role as

part of national security team to discuss these matters and the concerns you raised i understand, they are legitimate but we're working to make sure that women take these measures they are done inappropriate ways and legal ways and that is consistent with values. >> i would say the drone strike have occurred and outside of the hot battlefield we're not talking about countries where we are engaged with hostilities like iraq or afghanistan. i just don't understand why you wouldn't want the protection of of some sort of the judicial review of the target. i am not saying the president is wrong trying to kill american terrorists overseas who are plotting to

execute our citizens, but i am uncomfortable to give him that authority without any kind of judicial check. i am not comforted by the office of legal counsel opinions which i have read now for the legal basis. let me turn to a second point* you just made about a preference for capture. i have not seen a preference for capture. if you compare the number of terrorist suspects captured in the previous administration reverses this one there is a huge difference with the number of legal strikes with drones undertaken. is the reason for the exceedingly low number of captures coming due to the change of the obama

administration on detention and it does not want to send captives to guantanamo. isn't that really the reason? when you have a case i have been on a navy ship for two months. >> it is not eighth fact is not trying to bring some people not but it was captured and brought to us in the articles three court. the desire to capture is something that we take seriously because the gain intelligence but i am not sure how long he was. it was not a joy ride but

weaver gathering important intelligence from him from that community and then later after he was read his rights and wave them from law-enforcement. that was time well spent that led to his plea in that case with the conviction of the case so it is not a function to not to take prisoners to particular places to capture people and try to bring them to justice >> thank you know, how my time is expired. >>. >> i 12 take you to use the verizon scandal but i knew stand takes us to monitor up at 120 million calls. when government bureaucrats are sloppy they're usually very sloppy when just ask could you rusher that no

phones inside the cap paul were monitored. they would give the future executive branch to say union leverage over the legislatures. >> with all due respect i don't think this is the appropriate setting to discuss that issue. >> and the appropriate issues you have raised but in this open for of. >> i would interrupt to say no restaged within our means -- and we did not spy and members of congress. >> have a right to suggest when i read "the new york times" this morning it was like not one more thing and to so we will try one and to the full price -- planet needs to get a brief one and

the national security agency and other of her period sir timothy answers my question and that there are some one in that environment. also i will not determined. >> i would hope but the form is a classified hearing to give in to end it with us. and record his racing is in a fortune to question. us verify a creeper of. >> the sooner the better. i am sure they will. >> is i would like to suggest that i will send a

note to senator reid and mcconnell because it goes to judiciary or armed services or intel. and not only including the scope of the appropriations. >> but the oversight of justice did not? >> i was just for her separation of powers that whoever was so sloppy they probably did not segregate out the supreme court to make sure that when you jump added your executive branch lane you want to make sure and but not one single supreme court justice was involved but senator shelby raises a great point* but we will talk about how you

would like to proceed as they have a due diligence but also it does involve others in the justice department. >> but we made but to be anything respectful than the concerns that we raise there is no intention to do do anything of that nature to use by members of congress, and of the supreme court and without getting into specifics i will say that with regard to members of congress have been fully briefed as to the issues or matters have been under way and i am not comfortable to say it all lots but the concerns you have raised. >> we will stop here because

nothing that drives a seventh of all because that means the group of eight leadership it does not necessarily mean committees and is sitting right here now here's senator shelby and i a former chair of the intelligence committee and senator collins share of homeland security committee to a new framework so the leaders and senator graham and senator kirk was an intelligence office. >> but we have been -- ben in that circle so fully briefed does not mean you know, what is going on. >> but i know the of but this falls into the committee esses but i on

both to get into this we find the fbi and all of the operations in and if we do know and i know you will do the oversight. >> you are suggesting is a classified hearing for the full appropriations committee. sir? then we will proceed in that direction and we look forward to working with you in a collaborative way and actually we have the chair of with the fall expertise of the full committee. senator? >> i would just say. >> you were work on the gang violence is excellent on enough to have a question. >> i will be offering and an amendment to the market of this bill for $30 million to

identify games of national significance which i would hope would be the ones from illinois to talk about the need to arrest 80,000 people who are members of the gang and to do this especially because of might overwhelming concern for the baltimore game witches' shameless sucking up to the chairwoman. >> fed is it. because i raise this issue issue, lover is running this program knows that they really screwed up and i would just add that you seize the records and not allow the destruction of evidence that they have accidentally monitored other branches of the government. >> i will be more than glad to discuss this in an appropriate setting.

>> we will. >> senator graham? >> i am very glad i came. this is an interesting hearing. i will ask you a question. pay close attention. i know you do. the purpose of the patriot act and the fis a court and the national security administration is to make sure that we are aware of terrorist activity to disrupting plots against our interests abroad and at home is that true? in mx i would agree with that. >> the purpose is not to allow the executive branch to gather political intelligence on the judicial branch for the legislative branch. do you agree with that? >> i would agree with that estimate this is like killing innocent people in a cafe i know what you are trying to say there is no lawful authority to drone somebody who has done nothing wrong anywhere. do you agree with that?

>> yes. i agree. >> we're trying to capture and kill people who we believe have a national security threat to our nation. right? >> also true. >> one thing we try to do and the patriot act is to find out about terrorist organizations and individual terrorist, whose they may be talking to? >> again, that is over reaching. >> i hope the people appreciate we are at war. i sure as hell do and the way you protect the homeland is to try to find out what the enemy is up to. i am a verizon customer it does not bother me one bit the nsa to have my phone number because what they are trying to do is find out what terrorist groups that we know about and individuals and who the hell they are calling. if my number pops up on a terrorist phone i am

confident the fisa court will not allow my phone calls to be monitored by government unless you or others can prove to them in your up to a terrorist activity with a possible cause. this was created by the congress and made mistakes but the consequences to take these tools away from the american people would be catastrophic. so you keep up what you're doing it you go out inside the lane we need it from lifeline to of view. under the law lot of for their three branches of government. what branch the lead down have pathfinder's 35 commanders in chief. we have one. can you tell me any of their

time our judiciary to go for decision over whom the eat but to use of a leap of force from the executive branch. >> we operate within legal parameters but with that. >> i will be astonished for america entering this war to return over from the commander in chief the ability to use lethal force on the unelected judges to have no expertise and no background as to who the enemy is and whether or not we should use lethal force. the worst possible thing we could do is take away from his commander in chief and any other the power to determine who the enemy is at a time of war and to give it to a bunch of judges. that is the ultimate criminalization. i support you for having transparency and making a

hard call. but you have from my point* of view more than reasonable when it comes to a drone program and to the citizen if you side with the enemy and rigo serrate-- laborious process to a kill you or capture you the best way to do that is not allowed paul k. -- al qaeda. no doubt. >> nine. if you look at that letter we laid out why he was a target. he was an appropriate target is to make others to have associated is that correct? >> if we find him or kill him you need my permission because it is your job. she asked ed but to block on

top -- guantanamo bay in the future? there is the president has been clear it is not our intention to add any additional prisoners. >> okay. a jail cannot be a ship under the geneva convention it is not a viable option. so we are a nation without a jail though reason we put him on the ship we have no place to put him and this will catch up with us, this nation has lost the ability to gather intelligence because we don't have a present to put people if we don't correct that we will lose the label intelligence and do you agree is that the intelligence has made. >> when the reasons i think we got osama bin nodded was the intelligence gathered. >> would you agree with me one of the treasure troves

of intelligence with the war on tear comes from people at get no? >>. >> there is no doubt in my mind we did not torture our way to get the nod and we put the puzzle together in the big this pieces led to gitmo. sequestration. what is it doing to our ability to protect assassination? >> we are struggling to keep our resources is at the level where we can do our job. says jerry 2011 i put a hiring freeze in place and lost 600 prosecutors. >> did they quit? but you could be trickier that left the department of

justice and toe i am involved of the hiring freeze the furloughs we could avoid because of your system and might system are furloughs that we would have to institute with your agency and amir not part of the court and he will see my guess whoever the attorney general is a couple years from now you'll see reduced numbers of prosecution and that will be a function of sequestration that we try to deal with and also with your help i have said to but it really them members. the reason i asked him and i didn't want to it isn't a.

>> effect digest clarify the people, worth a we pay the price for the lack of

capacity. >> thank you and i wish i had been here for more of the discussion earlier it sounds like it was quite animated although i will diana back a little bit perhaps for the alaskans it is not diving backhand goes back to the misconduct that was found in the stevens prosecution some years ago and clearly admitted procedural defects and then after that the department has a disciplinary process. day e effectively that judge throughout it was troubling to mandate of us you wrote we feel of the difference should. >> but that is then blew a

of their decision to it to you think but to throw out the discipline where are we with this? alaskans are left dangling wondering if his the and the justice? they think no. >> i have respected the pavo who made that decision and made restitution is we will be appealing that decision. >> do look at any of the discipline system as a consequence of what we have seen? >> i think we have a system in place that i think works and is adequate. i don't agree with the way the board looks at the way we conduct that disciplinary system i think we follow the rules to come up with the sanction that was appropriate given the misconduct that was found

and we will be appealing that with the board's determination. >> i would encourage at and it unfortunately leaves the appearance that some of the folks that were not at the highest level of the decision making process were held accountable while others were given a pass and it does not set well so i would encourage that appeal and encourage you to look at how we might address clearly the gaps and discrepancies. the second question that is very parochial but we just passed the revitalization act that contains in section 909 may direct the justice department to consult with the state of alaska and to present recommendations

about restarting law enforcement throughout 2014. this is a commission that had been established some time ago to have a venue for various officials to come together to improve law enforcement, a judicial responses to crime and the commission is no longer active because of the earmarked funding had run out. we don't have any forum really to move forward on the commission work. you have your folks monday in the long dash important implementation have never enameled -- with the safe and particularly of the native villages and public safety, domestic violence and may need to turn this

around with your help. >> i agree. that is not a parochial concerns of one they have said -- search but they got outside of your stay and are worthy of your attention, my attention i look forward to working with you to come up with ways in which we can make effective that provision of the reauthorization and something we try to make a priority generally and the justice department raising the concerns of your stay are legitimate. they are not parochial they are national issues that require national response and attention. >> i appreciate that. thank you. >> if there are no other questions i was like to thank you until we meet again with the matter that we have discussed and there

are many questions we want to talk about and with your staff that we would like to hear from the inspector general. we know senators have of their duties but thank you for your flexibility with the schedule we had scheduled earlier today because of the votes, thank you for your cooperation and participating at the time we requested and will afford to working with you and your staff and we have a lot to do. >> thank you very much. >> thank-you chairwoman and members of the committee coming thank you for

allowing me to testify today it is just over one year and this extraordinarily busy time for me and the officer. but including on the atf operation "fast & furious", wide receiver and the improper hiring practices, handling of clemency request and handling of known or suspected terrorist in the of the federal witness security program. also reports did not make headlines that will help. >> we are issued and and audits of great recipients and we looked at the handling of the suspension and a u.s. marshal for the

emigration cases for of the same time they may need things for fraud offenses and those the resulted in 100 and administrative actions against department employees. i am proud to have a point* to a first effort doj person remus belief they can put waste and the '08 he has identified nearly $1 billion of question cost far more during that same period but sequestration has significantly impacted our office. we have received that

received an additional reduction because of approximately 79% of personnel related the budget reduction is a permanent reduction of a percent of our work force. we're already below the staffing levels when i became inspector general last year and we continue to substantially reduce or restrict spending these levels are negatively impacted our work in a number of ways including requiring us to reevaluate the number and types of investigations we can conduct going forward. regarding our plans for future work we saw this as the department top-10 challenges of a like to briefly mention three of them. first national security remains one of the highest priorities that is tragically demonstrated by the boston marathon bombings to conduct numerous views including intelligence

information sharing among federal agencies prior to the boston bombing in the coronation of aphids -- efforts to disrupt financing in the use of the task force. our report last month on the security program revealed the risk is to fail to properly share intelligence information and the department must ensure it is appropriately using investigative tools given and we continue to use a substantial work in this area include of national security levels and now some priorities must be the highest those are able to marry at we are under attack and to the operations to leave half to forget about

the capabilities of the field office. we made recommendations and are evaluating reviews in this area. third, may turn to the significant budget challenges the department is facing with the federal prison system the you mentioned earlier. even as the overall budget is shrinking to stand-up bar and an increasing share in that budget with the but the budget represented and i would know it did the department are the projected growth over the next several years continues and the department budget stays flat, that number grows at 30%.

>> more than the fbi are a neat and their time despite the federal tariff meant even with the additional funding. >> the president's path is unsustainable and the department must achieve the of recession and it and they face challenges but he is a guardian of our system of judge -- justice kid score with integrity and without bias. the oat insurers the fulfilment of that mission and afford to the subcommittee and the questions today. >> that was an excellent testimony and it really

raises fact there are many things i worry about with the department of justice and one is cost escalating in the program where you have to be so careful because we don't want to increase risk in the community and the other is cyber security. i will go there. mr. jewell this is a great concern comment horowitz i will hold of a hearing on cyber and the administration has asked for every agency of $13 billion. by and large because this committee works to the subcommittee we could have a stove to a perch and all we get is moke but i don't know if we get fire. the other thing i worry about to make sure that whatever we do we are

maximizing resources to give value for the dollar and committees were kid -- working in a coordinated way. also techno boondoggle were every betty but we ended up with this function so what would you say were the top three issues in the field of cyber security and how can we insist if there are but to insist upon and to of the love me mention right think of those. >> are my fears justified? cpac i think so and we have been reports in this area

about some of the technology efforts and implemented and is this -- it seems that it works like sentinel but this is the tenth report on the system we are preparing to do. but i think in terms of the significant issues, first and force -- for most is a private relationship and it is important for that government to reach out to the private sector and be willing to report a criminal activity to the department of justice and local areas we have but it is to make sure we do not just bring home run and component system but that is what we will look at at next now

with what we're doing because we have them working together to have the benefit >> we're doing a review on the wish list of the hand of one negative dose to the

federal prison population i think that you have raised in your report the compassionate program and aging population. that is a very intriguing it that is we down think is well managed but you have possibilities if done properly we can reduce the number but not increase the risk which is in the interest of the committee so could you share with us what the reform should be? >> as we indicated with a

compassionate release work as the gao indicated with what they have done with residential reentry and elderly populations we indicated on the individual transfer transport there are ways to manage the population and that allows individuals with very low recidivism rate it will never be at zero but as we have found it is about 3% though it starts very low-risk individuals. their elderly, prisoners released if you carefully select who was eligible you can find ways to address the issue was the potential for recidivism there are current problems that can be but that is a program of tens of

thousands of inmates and we found 299 inmates and if that number was less than 1%. >> we're not talking about the terror list. >> direct. we're talking about low-level offenders not nationals and a 27% of the prisoners and earned nine u.s. national. >> 27? >> 46% last year, the defendants were not u.s. nationals. >> could you repeat those numbers again? >> 27% to approximately current federal inmates are nine u.s. nationals and last year of 84,000 defendants approximately 46% were not

u.s. national. that number is significant and those individuals we have trees of countries around the world and our report found a 3% to proximate recidivism rate was people coming back to threaten but if you cannot manage a program like this you cat nine note -- non-violent members and individuals to have interacted inappropriately and hooch rise there are a variety of factors to look at so you don't want to look at sending tens of thousands of people overseas because we have found in the report if you just did 3% of the eligible inmates that would save about $50 million. >> 50 million? >> there are possibilities out there that i think need

to be addressed and a wide ranging issue. and it affects you is coming in the door and what happens in residential reentry center to find a lot of issues how the halfway house is managed and have to be managed better because they are an important transit point* for inmates to leave the prison to get back to the community to have that transition period in the center. >> thank you very much. turning to senator shelby that was of a good exchange and quite frankly an eye opener and i will be following up. >> of life to follow up of that currently?

>> approximately 46 percent. >> what percentage of that is violent crime? or how do you break that down? is it in generic? >> data have the numbers biking get those. but what you do find as the numbers seibald what used to be the largest share of defendants was the drug prosecution now immigration. drugs second and then you could have firearms. >> if you excluded conversation what about violent crimes all across the of board. >> one of the issues that congress tries to address is to figure out which

first-time offenders in a drug area might be for the reentry court because they don't have a connection to violence. >> to get back to an area public trust and confidence most of us would agree is key to a successful federal lawsuit in force whenever. if the department of justice is facing significant issues and particularly that jeopardize is so much of that confidence, what can be done to restore that public trust by the american people in your judgment? will it take new personnel? a different attitude? what will it take?

this is very much under attack the confidence of the american people because of a lot of things that prosecutors misconduct a lot of things. >> they are of utmost importance to the justice department and all the work there is to make arrests and try cases to have the confidence sitting in the jury box with what they're hearing and who they hear from. there has been a series of incidents at the justice department that have raised concerns in that regard we did a report on "fast & furious" with what we thought were highly problematic events involving both agents and prosecutors. you have seen this stevens

prosecution but others that were dismissed have raised concerns and the department has to keep in mind the importance of maintaining that integrity that has been on our top 10 list of challenges for the last several years because of that issue. >> the confidence of the american people would it not be based on the trust, a trifle less, of veracity evenhandedness, honesty of the department of justice? >> exactly. critical point* but if that is questioned it undermines law enforcement. >> certainly if there is a basis and that takes hold, law-enforcement prosecutors. >> i just have a few more seconds.

the into the area of cyber crime that is so important we always had the time of the romans and the greeks and persians industrial espionage. people trying to figure out how they made it and we understand that. it is big but it seems now with the computer age that it has gotten easier and other countries including our friends are interested in the process of tomorrows product be vague pharmaceutical, weapons, any thing, you name it. cyber is so important but the defense against that, i think in the cyber four we better not forget you have

competitors in the world getting into this so-called industrial secrets and so far -- so forth built up over years billion dollars of research and i agree with senator mikulski it is a real challenge for this country from the economic standpoint and always national security. >> directory and we'll understand whether the private sector brings that evidence and. >> what do you need? what is the justice department made? they need resources is is the appropriations committee but they need the tools and it is changing every day?

>> constantly evolving. >> it is not going away. >> i would doubt that. >> is this one of the biggest challenges in the nation right now? >> clearly one of the most significant challenges we're facing. >> thank you. >> great question. >> thank you. first want to commend the ig for what i think is truly extraordinary work with a very productive time during his leadership last month your office released a summary of the interim report of the department's handling of the of known or suspected terrorists. that have been the admitted into the federal witness protection program. it came as a shock that we

had known or suspected terrorist who are part of the witness protection program but that is another issue. but this is illustrated a failure of government to share absolutely vital information and in this case according to your report the federal witness protection program was not sharing information about these suspected even known terrorist who have been the admitted to the program with the terrorist screening center. the reason this is important is that the watch list is used by psa for the no-fly last.

here we have a situation where one agency has admitted known or suspected terrorists into the program may have changed identities to give them there names likely and is not sharing that information to allow gsa to put these individuals on the no-fly list or at least the last careers if it affects the screening. i would like to ask if you found out if these individuals did fly on commercial flights because their names were not on the no fly less? >> reid did find out that they flew with permission of the marshal service that we did not find out if on their

own accord that they have that ability to do so using the new identity even though under their real name they were put on the no-fly list by the gsa because the criminal division of the marshall service did not share with the tsa the new identity of that individual. >> think how extraordinary this terrorist real name is known and on the no-fly list but the new identity created by our government under the witness protection program is not shared with the screening center and that identity which is what they are using allows them to escape? we know there is some officials' travel necessary

that you referred to but the fact is we have no idea if these individuals travel on their own. is that correct? >> correct. my second and related question to this is where they accompanied auntie airplane at the official be heston the government? >> our understanding is to marshals brought them to the plane and then they were not escorted further until they landed to get off on the other side where to marshall's met them. but the travel themselves nobody accompanied them. >> think of this. this is so extraordinary these individuals are dangerous the naps that to marshals accompanied them to the gate to get them on the

plane but yet they fly without any marshal's accompanying them or assigned to them and they're so dangerous they are met at the other end? this is mind-boggling to me. is there in line negative any information that suggests the air marshal's who are on planes were informed of the presence of the known or suspected terrorist? >> we are not aware of the air marshal's if they were on the plane were notified. it appears the effort to compartmentalize on this is limited to sharing. >> so it is not as if the air marshal took over while they are wrong on the plane

i find this mind-boggling and so unacceptable and dangerous and i want to thank you publicly for doing this and revealing this incredible gap. do your work and know the department of justice is looking to change its procedures but it is extraordinary that have been on the first place and thank you for your good work. my time is expired. >> senator collins i invite you first of all, and during those times even with the watch list we have citizens so if you are a terrorist you don't get on the watch list so i would invite you

and your staff. >> thank you madam chairman i would agree this has been a fascinating hearing with the expertise -- expertise our colleagues i am just thinking about all that you have detailed that you just have to shake your head at what goes on as it was just announced that it will not enforce the rule to allow small knives on the airplane as insignificant as it was it was just one more example of how we're able to confuse and confound the public when it comes to safety. so i also thank you for your work here.

but to talk about the public trust of how we regain that confidence because it has we have the opportunity to visit and in that meeting the inspector general is confined and you are bound by section 8 of the inspector general act that precludes with the work of the attorneys of the work of the ig can look at everybody else to do the independent review and investigation but when it comes to the department of justice attorney, they are exempted. you shake your head and say why is this? that i would have liked to have seen a truly

independent inquiry if the justice department litigators had made the right decision and i mentioned in that terrible situation of senator stevens. but yet we are told through your office and the predecessors it is not possible with this provision in the act. can you tell me if there is any legitimate reason why this section should not be modified to allow your office to conduct the independent inquiry into the department litigation unit? . .